Electronic sick leave certificates. Expectation and reality

Electronic sick leave certificates will be introduced everywhere in the Russian Federation from July 01, 2017 onwards (Federal Law N 255-FZ dated December 29, 2006). This is intended to make life easier for polyclinics, patients, the Social Insurance Fund and employers. A single automated system will indeed ensure fast transfer of information and minimize errors as shown by successful pilot projects.

In this article, we do not quote the amendments to Federal Law N 255-FZ nor do we describe how sick leave certificates are issued and circulated.

Elena Rybnikova
Head of Internal Audit, Expertise and Methodology Department
We briefly outline the main points and consider the details of the main changes. We also address the issues left unanswered in the new legislation and not yet clarified by the authorities.

1. If a medical organization and an employer are connected to the electronic sick leave certificate system on fss.ru, then this employer’s employees visiting this medical organization can ask (in writing) for an electronic sick leave certificate.

2. The employer will within 5 calendar days enter in the automated system the information and documents necessary for calculation of income for the period of work incapacity, thus completing its part of the sick leave certificate.

3. The income payable to the employee according to the electronic sick leave certificate is then calculated within 10 calendar days.

4. Accrual of amounts payable according to electronic sick leave certificates:
  • Sick leave for employee illness – the employer pays the first 3 days of sick leave, and the remaining days are paid by the Social Insurance Fund.
  • Sick leave for child care – the Social Insurance Fund pays for the entire period of temporary incapacity for work.
  • Sick leave for pregnancy and childbirth – the Social Insurance Fund pays for the entire period of temporary incapacity for work.
  • Sick leave for work-related injury – the Social Insurance Fund pays for the entire period of temporary incapacity for work (an accident investigation report should be submitted additionally).
  • If a sick leave certificate is issued to people who have voluntarily contributed to compulsory social insurance – the Social Insurance Fund pays for the entire period of temporary incapacity for work.
Federal Law N 255-FZ provides that connecting to the electronic sick leave certificate system is not a right, but an obligation for employers. Article 4.1(2(1)) requires to register with local offices in the cases and as established by Article 2.3 of Federal Law N 255-FZ so only employees can choose to receive their sick leave certificate in electronic or paper form, and employers must accept any sick leave certificate whether electronic or paper.

The rules for payment under a paper certificate for temporary incapacity for work have not changed, but if an electronic certificate is submitted, then the new rules apply as specified in Federal Law N 255-FZ.

A question arises regarding the period of 5 calendar days for submission of documentation (Item 3 Decree) as it will not be possible to meet this deadline if an employee brings his/her sick leave certificate, for example, on December 29, 2017 as long holidays start after this date, and the employer has a few (if any) hours to submit information. This situation may also arise in May where there are many public holidays. On the one hand, this is an objective reason for failing to submit documents for calculation of sick leave benefits, but on the other hand, this is also a direct violation of federal law.

Employers make sick leave payments on the day following the payment of salary as established by the company. There are no statutory deadlines for payments to be made by the Social Insurance Fund for temporary work incapacity. The law only requires the Social Insurance Fund to calculate sick leave benefits within 10 days. Payment is made to the employee’s bank account after such calculation provided that the relevant information was submitted by the employer or sent by postal mail (postal expenses are incurred by the benefit recipient).

Another important issue is the recalculation of sick leave benefits.

To recalculate already awarded benefit, the insured (authorized representative) should submit to the insuring party an application for recalculation of awarded benefit together with the documents necessary for such recalculation. The application form for recalculation has been approved by the Social Insurance Fund.
(Item 2(4) Russian Government Decree No. 294 dated April 21, 2011 On the Particularities of Financial Support, Purpose and Payments made in 2012-2019 by Local Offices of the Social Insurance Fund of the Russian Federation to Persons Insured for Compulsory Social Insurance)

It is no secret that payroll recalculations are an ordinary event in the life of an organization. They are usually due to clerical errors, late submission of documentation to the payroll department, and so on.

Employers may recalculate the 3-day period they should pay, while the Social Insurance Fund recalculates the rest. To do so, it is necessary to submit documentation to the Social Insurance Fund within 5 calendar days.

Please note that sick leave benefits may be recalculated only if the insured person (authorized representative) submits an application for recalculation. The local offices of the Social Insurance Fund then recalculate the benefits for the entire period for which they had been already awarded, but this period cannot exceed three years from the day of submission of the insured person’s income statement(s).

The following issue remains open: What happens if after recalculations we find that sick leave benefits has been overpaid? It is, of course, unlikely that an employee would submit an application in case of benefit overpayment, but if such situation arises, there is no established procedure for refund of overpayments to the Social Insurance Fund.

There is another unregulated issue related to personal income tax. Since benefits for temporary work incapacity are subject to personal income tax, the law sets out that the Social Insurance Fund is to accrue and pay personal income tax upon payment of benefits, but does not provide how the Social Insurance Fund should report withheld and paid personal income tax to tax authorities.

So, for example, an employee was ill and received an electronic sick leave certificate. The employer and Social Insurance Fund paid the appropriate sick leave benefit and withheld personal income tax from the paid sick leave benefit. This very same year, the employee buys an apartment and decides to take advantage of property deduction. The employee requests a personal income statement from the employer, but the amounts paid by the Social Insurance Fund and the personal income tax withheld from these amounts are not and should not be in this statement. What should be done? Should the employee request a statement from the Social Insurance Fund? This issue also remains unregulated.

I will not strongly recommend employees not to request electronic sick leave certificates until the above issues are regulated because it is basically a good idea to introduce an electronic document management system, and everyone involved in this process should learn to use this system while we wait for clarifications from the legislators.